In a significant shift in market dynamics, Hong Kong stocks experienced a notable increase, fueled by optimistic expectations surrounding peace talks between the U.S. and Iran. The Hang Seng Index surged by 2.82%, reaching 25,824.43 points, while the Technology Index and State-Owned Enterprises Index followed suit, rising by 4.42% and 2.36%, respectively.
Among the early trading highlights, stocks in the optical communication, memory technology, gold, and airline sectors showed remarkable strength. In contrast, energy stocks faced a decline, particularly those related to coal, oil, and oil equipment.
The optical communication sector emerged as a standout performer, with several companies witnessing substantial gains. Huitong Technology jumped 18.47%, Changfei Fiber Optic Cables rose 15.56%, and Cambridge Technologies saw a 7.33% increase. Analysts attributed this bullish trend to an ongoing global demand surge for AI computing power, which has led to an increase in shipments of 800G optical modules. According to a report from China Merchants Securities, the prosperity of the optical module industry is expected to continue as capital expenditure from overseas cloud vendors recovers, indicating a promising long-term growth trajectory for optical communications.
Meanwhile, the memory stocks also demonstrated considerable strength, driven by a favorable supply-demand balance. Montage Technology soared by 11.77%, while Zhaoyi Innovation rose 3.58%. Recent research indicates that major memory manufacturers are increasingly moving away from producing older DDR4 and lower products. As a result, the memory market has seen significant price increases over recent months, a trend expected to continue through the second quarter of 2026.
In the gold sector, strong support from the central bank reignited investor interest, leading to gains for companies such as Zhufeng Gold, which rose nearly 12%. The People’s Bank of China reported an increase in its gold reserves, marking a notable uptick in its holdings, which have been consistently trending upward for 17 months.
The airline sector also entered a strong performance period, driven primarily by a decline in international oil prices. By midday, shares of major airlines such as China Eastern Airlines, China Southern Airlines, and Air China experienced rises of 8.06%, 5.68%, and 5.42%, respectively. The drop in WTI crude oil futures, which at one point fell nearly 19%, has significantly alleviated cost pressures associated with aviation fuel, thereby enhancing profit expectations for these airlines.
However, the sharp drop in oil prices has adversely impacted energy stocks. Companies in the energy sector, particularly in coal and oil, experienced considerable sell-offs. Shandong Molong’s shares fell by over 6%, while coal stocks, including Yancoal Australia and China Coal Energy, also recorded losses, reflecting the broader declines in the energy market.
In summary, the Hong Kong stock market has shifted towards growth sectors such as optical communication and aviation, while the energy sector grapples with significant challenges stemming from falling oil prices.
